Perry Ellis International, Inc. (NASDAQ:PERY) Files An 8-K Entry into a Material Definitive Agreement

Perry Ellis International, Inc. (NASDAQ:PERY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

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On October23, 2018, Supreme Realty, LLC (“Supreme”) entered into a Credit Agreement, dated as of October 23, 2018 (the “Doral Credit Agreement), with Mercantil Bank, N.A. (“Mercantil”). to the Doral Credit Agreement, Mercantil extended a loan to Supreme in the aggregate principal amount of $5,829,135.00 (the “Doral Loan”), secured by a second mortgage on an office warehouse building in Doral, Florida. Interest on the Doral Loan is payable at a rate equal to 250 basis points above the eight-year SWAP Rate, as defined. The Doral Loan matures in eight years and requires monthly payments of principal and interest based on a 25-year amortization. The Company provided an unlimited and unconditional guarantee of the Doral Loan.

On October 23, 2018, Tampa DC, LLC (“Tampa LLC”) entered into a Credit Agreement, dated as of October 23, 2018 (the “Tampa Credit Agreement”), with Mercantil. to the Tampa Credit Agreement, Mercantil extended a loan to Tampa LLC in the aggregate principal amount of $5,030,846.00 (the “Tampa Loan”), secured by a second mortgage on an office warehouse building in Tampa, Florida. Interest on the Tampa Loan is payable at a rate equal to 250 basis points above the eight-year SWAP Rate, as defined. The Tampa Loan matures in eight years and requires monthly payments of principal and interest based on a 25-year amortization. The Company provided an unlimited and unconditional guarantee of the Tampa Loan.

The Doral Loan and the Tampa Loan are cross collateralized and cross defaulted to a Cross Collateralization and Cross Default Agreement among Supreme, Tampa LLC and Mercantil.

Item 1.01. Termination of a Material Definitive Agreement.

In connection with the consummation of the Merger, the Amended and Restated Loan and Security Agreement, dated December 2, 2011, among the Company, the subsidiaries named as Borrowers or Guarantors therein, the Lenders named therein, Wells Fargo Bank, National Association, as agent for the Lenders, and Bank of America, N.A., as syndication agent, as amended, was terminated and all obligations outstanding thereunder were repaid effective as of October 22, 2018.

Item 1.01. Completion of Acquisition of Disposition of Assets.

The information set forth in the Introductory Note and in Items 1.01, 3.03, 5.01, 5.02 and 5.03 of this report is incorporated herein by reference.

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $.01 per share (“Company Common Stock”), of the Company owned immediately prior to the Effective Time, other than as provided below, was converted into the right to receive $27.50 in cash (the “per share merger consideration”), without interest and less any applicable withholding taxes. The following shares of Company Common Stock were not converted into the right to receive the per share merger consideration in connection with the Merger: (i)shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries; (ii)shares of Company Common Stock held by the Rollover Investors; and (iii)shares of Company Common Stock whose holders did not vote in favor of adopting the Merger Agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the Florida Business Corporation Act (“Dissenting Shares”).

In connection with the consummation of the Merger, (i)each stock option and stock appreciation right, whether or not then exercisable or vested, was converted into the right to receive at the closing cash equal to the product of (a)the excess, if any, of the merger consideration over the per share exercise price of the applicable option or stock appreciation right and (b)the number of shares of Company Common Stock underlying such option or stock appreciation right; (ii)each restricted stock award not subject to any performance-based vesting condition held by an employee was automatically vested and converted into the right to receive at the closing cash equal to the product of (a)the per share merger consideration and (b)the number of shares of Company Common Stock subject to such restricted stock award; (iii)each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors of the Company vested on a prorated basis based on the number of days that elapsed since the grant date of such award and was converted into the right to receive at the closing cash equal to the product of (a)the per share merger consideration and (b)such pro-rated number of shares; and (iv)with the exception of certain management members described below, each restricted stock award subject to any performance-based vesting condition was converted into a right to receive a restricted cash award from the surviving corporation that will vest and be payable (without regard to any performance goals but subject to applicable service vesting conditions in the prior award) at the end of its currently applicable vesting period, with the cash payment therefor equal to the product of: (a)the per share merger consideration and (b)the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. Such restricted cash award will accelerate upon a termination without cause or for good reason prior to the scheduled vesting date. Each restricted stock award subject to any performance-based vesting condition held by Mr.Jorge Narino or Ms.Tricia McDermott Thompkins was converted into a right to receive at the closing a cash payment equal to the product of: (a)the per share merger consideration and (b)the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. All outstanding restricted stock units held by George Feldenkreis were cancelled.

The aggregate merger consideration is approximately $437 million and was funded by the proceeds received in connection with the debt financings described in Item 1.01 of this report, as well as cash on hand at the Company and its subsidiaries.

The Rollover Investors contributed, in the aggregate, approximately 19.8% of the outstanding shares of Company Common Stock immediately prior to the Effective Time to Parent in exchange for a pro rata share of the equity of Parent based on a value of each share of Company Common Stock so contributed of $27.50.

George Feldenkreis is the founder of the Company and a member of the board of directors of the Company. George Feldenkreis beneficially owned approximately 10.8% of the Company Common Stock before completion of the Merger. Oscar Feldenkreis is Chief Executive Officer, President and a director of the Company and the son of George Feldenkreis. Oscar Feldenkreis beneficially owned approximately 7.7% of the Company Common Stock before completion of the Merger.

A special committee of the board of directors of the Company, comprised entirely or independent and disinterested directors, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the Merger, voted unanimously to approve and declare advisable the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement, and declare that the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and the unaffiliated shareholders of the Company. On October 18, 2018, the proposal to adopt the Merger Agreement was approved at a special meeting of shareholders of the Company by the affirmative vote of the holders of (i) a majority of the outstanding shares of Company Common Stock entitled to vote thereon, and (ii)a majority of the outstanding shares of Company Common Stock entitled to vote thereon not owned by (A) officers or directors of the Company, (B) the Rollover Investors or (C) any person having any equity interest in Parent or Merger Sub.

The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 to this report and is incorporated herein by reference.

Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in the Introductory Note and Items 1.01 and 2.01 of this report is incorporated herein by reference.

Item 1.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

The information set forth in the Introductory Note and Items 2.01 and 3.03 of this report is incorporated herein by reference.

Prior to the open of trading on October 22, 2018, in connection with the consummation of the Merger, the Company notified The NASDAQ Global Select Market (“NASDAQ”) that the Merger had been consummated and requested that the trading of the Company Common Stock on NASDAQ be suspended and that the listing of the Company Common Stock on NASDAQ be withdrawn.In addition, the Company requested that NASDAQ file with the Securities and Exchange Commission (the “SEC”) a notification on Form25 to report the delisting of the Company Common Stock from NASDAQ and to deregister the Company Common Stock under Section12(b)of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Company also intends to file with the SEC a Form15 requesting that the Company’s reporting obligations under Sections13 and 15(d)of the Exchange Act be terminated or suspended.

Item 1.01. Material Modification to Rights of Security Holders.

The information set forth in the Introductory Note and Items 2.01, 3.01 and 5.03 of this report is incorporated herein by reference.

As a result of the Merger, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than certain excluded shares and Dissenting Shares) was automatically canceled and ceased to exist, and was converted into the right to receive the per share merger consideration, without interest and less any applicable withholding taxes. Accordingly, at the Effective Time, the Company’s shareholders immediately before the Effective Time ceased to have any rights in the Company as shareholders, other than their right to receive the per share merger consideration or, with respect to shareholders holding Dissenting Shares, appraisal rights.

Item 1.01. Changes in Control of Registrant.

The information set forth in the Introductory Note and Items 1.01, 2.01, 3.01, 3.03 and 5.02 of this report is incorporated herein by reference.

On October 22, 2018, to the terms of the Merger Agreement, Merger Sub was merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. Parent is owned by the Rollover Investors.

Upon completion of the Merger, George Feldenkreis beneficially owns, directly or indirectly, approximately 50.6% of the Company’s voting securities, Oscar Feldenkreis beneficially owns, directly or indirectly, approximately 39.0% of the Company’s voting securities, and Fanny Hanono (the daughter of George Feldenkreis), beneficially owns, directly or indirectly, approximately 10.4% of the Company’s voting securities.

Item 1.01. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth in the Introductory Note and Item 1.01 of this report is incorporated herein by reference.

In connection with the consummation of the Merger, George Feldenkreis, the sole director of Merger Sub immediately prior to the Effective Time, became the sole director of the Company. Accordingly, as of the Effective Time, each of Oscar Feldenkreis, Bruce J. Klatsky, Michael W. Rayden, J. David Scheiner, Joe Arriola and Jane E. DeFlorio ceased to serve as a director of the Company.

Item 1.01. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in the Introductory Note and Item 1.01 of this report is incorporated herein by reference.

In connection with the consummation of the Merger, (a) the Company’s articles of incorporation were amended and restated in their entirety to be in the form prescribed by the Merger Agreement, and (b) the Company’s bylaws were amended and restated in their entirety to be in the form prescribed by the Merger Agreement. The foregoing summary of the Company’s sixth amended and restated articles of incorporation and third amended and restated bylaws does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the sixth amended and restated articles of incorporation and third amended and restated bylaws of the Company, which are filed as Exhibits 3.1 and 3.2 to this report, respectively, and are incorporated herein by reference.

The information set forth in the Introductory Note and Item 1.01 of this report is incorporated herein by reference.

On October 22, 2018, the Company issued a press release announcing the completion of the Merger. A copy of such press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference.

Item 1.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of June 15, 2018, by and among Feldenkreis Holdings LLC, GF Merger Sub, Inc. and Perry Ellis International, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Perry Ellis International, Inc. with the Securities and Exchange Commission on June 20, 2018)
3.1 Sixth Amended and Restated Articles of Incorporation of Perry Ellis International, Inc.
3.2 Third Amended and Restated Bylaws of Perry Ellis International, Inc.
99.1 Press Release dated October 22, 2018


PERRY ELLIS INTERNATIONAL, INC Exhibit
EX-3.1 2 ex31to8k11576002_10222018.htm Exhibit 3.1   SIXTH AMENDED AND RESTATED ARTICLES OF INCORPORATION OF PERRY ELLIS INTERNATIONAL,…
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About Perry Ellis International, Inc. (NASDAQ:PERY)

Perry Ellis International, Inc. is an apparel company. The Company designs, sources, markets and licenses its products nationally and internationally at multiple price points and across all levels of retail distribution. It operates through four segments: Men’s Sportswear and Swim, Women’s Sportswear, Direct-to-Consumer and Licensing. Its Men’s Sportswear and Swim, and Women’s Sportswear segments are engaged in design, import and distribution of apparel to department stores and other retail outlets, primarily across the United States. Its Direct-to-Consumer segment is engaged in the sale of its branded and licensed products through its retail stores and e-commerce platform. Its Licensing segment includes royalties associated from the use of its brand names. Its brands include Perry Ellis and Original Penguin by Munsingwear (Original Penguin), Ben Hogan, Cubavera, Farah, Grand Slam, Jantzen, Laundry by Shelli Segal, Rafaella and Savane.

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